"automatic return-based linebreaks (on)" -- Please, no. Markdown already includes syntax for lists and code blocks. There are very few other occasions where you need a hard line break. Currently markdown works both for people who like to hard-wrap their text and for people who don't. It's best to keep it that way. The proposed change would radically change how most existing markdown documents are rendered. And why? Because some new users are surprised that hard breaks are treated as spaces? The same users are surprised when indented paragraphs are treated as code. No matter what the rules are, some users will be surprised by them.
Saying it's a choice with a default doesn't help. That just fragments markdown into many variants, so that you can't be sure that markdown that works fine on one site will render the same on another. It would be best to reduce fragmentation rather than fostering it.

Markdown is a simple little humane markup language based on time-tested plain text conventions from the last 40 years of computing. Meaning, if you enter this… …you get this! Lightweight Markup Languages ============================ According to **Wikipedia**: > A [lightweight markup lan...

A better spec is sorely needed. There have been calls for this for years on the markdown-discuss mailing list, but never any uptake. I wish you luck in persuading John Gruber, who has been resistant even to requests for informal clarifications of the spec. Here is his most recent contribution to the markdown-discuss list, after a long period of absence:
http://www.mail-archive.com/markdown-discuss@six.pairlist.net/msg02703.html
In any case, I am willing to help out. I have written three markdown implementations: pandoc (in Haskell, using parser combinators, http://johnmacfarlane.net/pandoc), peg-markdown (in C, using a PEG grammar, https://github.com/jgm/peg-markdown), and lunamark (in lua, using lpeg, https://github.com/jgm/lunamark). So I know quite a bit about parsing markdown, and particularly about what would have to be settled in a more determinate spec.
To start, here is a list of some big (not edge-case) questions that the current syntax description leaves open:
http://johnmacfarlane.net/babelmark2/faq.html#what-are-some-big-questions-that-the-markdown-spec-does-not-answer
The list includes links to a tool which will show you the output of a bunch of different implementations, so you can see how they differ. Further up in the FAQ you'll find a longer list of divergences between various implementations (including lots of bugs).

Markdown is a simple little humane markup language based on time-tested plain text conventions from the last 40 years of computing. Meaning, if you enter this… …you get this! Lightweight Markup Languages ============================ According to **Wikipedia**: > A [lightweight markup lan...